Also by
this autumn, all public sector departments will have to regularly review their
need for freelance contractors, including time in the role and progress in
replacing them with employees.

Subsequently
in December, all public departments will come up with a five-year
"strategic workforce plan" which will detail skills-gaps and the
external freelancers necessary to fill them.

Departments
should also by order of the Treasury be made to review whether their
off-payroll staff, notably any freelancer engaged as a company, should be ‘on
payroll’ and on PAYE.

And then
(after April 2017), assuming the proposed IR35 changes come
into force, all departments will review the calculation of tax for “a sample”
of their PSC freelancers, in a bid to test, monitor and maintain compliance.

New IR35 tax rules ‘will apply’

But
stoking fears of a ‘done deal,’ Treasury minutes recording agreement to these freelancer-centric
timeframes reveal that the public sector IR35 proposal
will
become law.

“After
April 2017, the new tax rules announced at Budget 2016
will apply,” state the Treasury minutes, referring to the ex-chancellor’s IR35
proposal. “The Treasury will consider whether changes to [departmental]
guidelines [on IR35 in the public sector] are necessary.”

Except for
this autumn’s IR35 tool, which is already secretly online according to a source
who met with HMRC last week, these actions (and timeframes) have been
explicitly accepted by the government.

They were
tabled by spending watchdog the Committee of Public Accounts, which says it is
unconvinced that departments are doing enough to ensure freelance contractors
pay “the right tax.”

HMRC
believes its IR35 proposal is the answer. “[It] will make the engager
responsible for paying and accounting for the taxes rather than just checking
they have been paid,” the department said in a statement to FreelanceUK.

But this
trio will not be “fully” reflective of the way that they “have been used as
defining factors [in IR35] before,” at least according to a pre-beta version Ms
Walsh says she has seen.

A HMRC
spokesman reflected: “We are consulting on the development of a new tool – not ESI but a new product --
and over the summer we areasking customers about the right questions to
go into the tool.”

‘Both the public and private’

Ms Walsh
partly agrees: “It's been developed [already], but it's not due for BETA
release until late autumn after we so-called ‘experts’ have contributed our two
pence worth.”

She
added: “I don't think there will be any change of plan or additional
announcements in Autumn
Statement 2016, yet I envisage that guidance on the IR35 tool will be
heavily publicised to both the public and private sectors.”

“We have
heard from both engagers and contractors that greater information and clarity
would be welcome. The legal reform is about the public sector but we continue
to want to hear from the private sector as this tool willhelp them too.”

Duncan
Strike, a senior director of Intouch Accounting, believes that reading between
the lines of the Revenue’s statements, including the spokesman’s, isn’t
difficult to do.

“Clearly,
if an assessment tool can be designed that gives unchallenged clarity to
employment status [for PSCs], then it will be rapidly extended to the private
sector,” he said.

‘A long way off’

Another freelancers’
accountant, Ms Walsh, who runs Andraste Accounting Ltd agrees and thinks it is
“a mistake to believe the proposals are [public] sector-specific.”

“Given
HMRC's approach to its customers' attitude towards compliance, I imagine that
it is expected that this learned knowledge will transfer to the private sector
in time,” she says.

“If the
law can be reformed to transfer PAYE debts to public sector engagers, then it
is entirely possible that it can be reformed to bring private sector companies
in scope. For me [though], that's a long way off”.

Indeed,
to be fit for the private sector the IR35 tool must contain the decisions of 16
years of court rulings; consider roles, seniority, contractual terms and
working practices across a multitude of industries, said Mr Strike.

‘Minor tweaks’

For its
use in the public sector though, its programming is already underway.

“HMRC
gave us various documents and charts setting out their thoughts on the
questions to be used in the tool and how such things as RTI will be operated by
the agencies,” said Ms Cottrell, reflecting on the latest meeting of the IR35
Forum.

She
added: “It is clear that the new rules will be going ahead from April 2017,
although there could be some minor tweaks.”